Young workers: Battle over youth pay rates

Arguments fierce as Parliament reconsiders Starting Out Wage to boost work for teens.

Sue Bradford. Photo / NZPA

The temperature in Parliament is sure to rocket when the law "reinstating" youth rates is debated this week.

It happens every time the emotive issue is debated, as it did last week when the bill to bring them back passed its second reading.

Even the Pope was brought into the debate.

Labour Minister Simon Bridges wants to get the Minimum Wage (Starting-Out Wage) Amendment Bill passed this week so it is ready to take effect on May 1.

The new youth rates will be called the Starting Out Wage.

Labour says youth rates will be reinstated, suggesting that they were previously abolished.

But Labour did not support the bill of former Green MP Sue Bradford to abolish youth rates. It opted instead for a dilution of her bill but which limited the amount of time that a new young worker could remain on youth rates to 200 hours or three months.

National went to the last election campaigning for a change to that regime, saying the move had contributed to a significant rise in youth unemployment.

At the heart of this argument is not whether youth rates discriminate on the basis of age, but whether the discrimination can be justified.

National, Act and United Future say it will give employers an incentive to take on young workers who would otherwise be disadvantaged against more experienced workers or picking up a benefit.

Opposition parties say it cannot be justified on any grounds and the Green Party has laid a complaint with the Human Rights Commission.

The $13.50 minimum wage will be raised to $13.75 on April 1. From May 1 the Starting Out Wage would be 80 per cent of that, or $11.

Act leader John Banks said his party believed 80 per cent was too high as a minimum. In Britain the rate was 60 per cent for 16-year-olds and in Australia it was 48 per cent for 16-year-olds.

He compared the Starting Out Wage to the dole, paid to 40,000 young people every fortnight between 15 and 19 - equivalent to $4.50 an hour. He said they desperately needed the "dignity of work and a job opportunity".

He said he had employed thousands of young people in the Tony's restaurant chain, which turned 50 this year.

Labour MP Darien Fenton compared the move to discrimination against women and Maori who at one time were paid less because some people said they were worth less. No one would tolerate that type of discrimination today.

It would then also be acceptable, she said, to discriminate against older workers.

"Some argue that older workers are less productive, yet there is no age-based minimum for them."

The implication of the bill was that the work of younger employees was of lesser value.

"It perpetuates its stereotype of young workers being unreliable and incapable, and it ignores the fact that many young workers have already had considerable work experience at the age of 16."

Labour's Andrew Little spoke about the commitment of the new Pope Francis I to alleviate the burdens of the poor. "This legislation is no way to go about it."

One of the strongest submissions against the bill came from the Human Rights Commission. It said unequivocally that the discrimination could not be justified.

"In New Zealand, the age at which children and young people are deemed to be adult is considerably younger than 20 in many critical areas of life.

"The minimum age of criminal prosecution is 14 for most offences, 12 for serious offences and 10 for murder and manslaughter.

"Children in New Zealand are legally able to marry at 16 (with parental consent if either party is 16 or 17) and drive at 16.

"Children can enlist in the military at 17 and be deployed at 18.

"Yet they are not considered to be sufficiently adult enough to be protected by the minimum wage."

Young people on the New Entrant wage will not be able to have their wages cut when the law takes effect.

Divisive issue

Bradford's bill

* A Sue Bradford bill in 2007 tried to abolish youth rates altogether which were 80 per cent of the adult minimum wage to all those under 18.* Her bill did not get enough support to pass so it was amended in select committee with the support of Labour and NZ First to produce the current regime, which reduced the time some young workers stayed on youth rates.

Present regime

* From 2008, a New Entrant wage was set for 16 and 17-year-olds, being 80 per cent of the minimum wage, but only for the first 200 hours' work or first three months worked, whichever is shorter. After that they must be paid the adult minimum wage. Young workers supervising or training other workers have to get the adult wage.* The training minimum wage (also 80 per cent of the adult minimum wage) applies to 16 to 19-year-olds doing at least 60 credits a year in an industry-recognised qualification.

The future

* From May 1, the new entrant wage will be renamed the Starting Out Wage. It will be 80 per cent of the adult minimum wage.* Starting Out Wage may be paid to:* 16 and 17-year-olds for their first six months of work with a new employer and then they must get the adult wage.* 18 and 19-year-olds who have been on a social welfare benefit for six months or more.* 16 to 19-year-olds training and doing at least 40 credits in a recognised industry course.